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Market manipulators used Tether’s USDT token to artificially inflate the bitcoin price during 2017’s prolonged bull run. That’s according to explosive new research from University of Texas finance processors John Griffin and Amin Shams, best known for identifying suspicious activity in the VIX last year.

Writing in a 66-page report titled “Is Bitcoin Really Un-Tethered?,” Griffin and Shams argue that tether, a “stablecoin” that is allegedly backed by USD at a 1:1 ratio, has been repeatedly used to provide price support for bitcoin during market downturns.

Bitcoin Price Chart

“Overall, we find that Tether has a significant impact on the cryptocurrency market. Tether seems to be used both to stabilize and manipulate Bitcoin prices,” the researchers wrote. “Less than 1% of hours with such heavy Tether transactions are associated with 50% of the meteoric rise in Bitcoin and 64% of other top cryptocurrencies.”

While that correlation could simply be due to the fact that an inflow of tethers signals a spike in demand from traders, the researchers claim that other data suggests that tether may not be fully-backed by USD — at least not all the time.

As evidence for this claim, the Griffin and Shams note that there tends to be negative end-of-month pressure on the bitcoin price in months when a large number of tethers have been issued but not in others. This, they say, may indicate a “month-end need for dollar reserves related to Tether,” implying that Tether issues un-backed tokens to help buttress the bitcoin price and then sells enough BTC at the end of the month to fully back the outstanding USDT.

As CCN reported, Tether has increasingly come under scrutiny as the tether token’s market cap has swelled over the past calendar year. Since exchanges often face difficulties finding the banking partners and achieving the regulatory compliance necessary to offer fiat-to-crypto trading pairs, many altcoin exchanges use tether as a proxy for physical USD.

The US Commodity Futures Trading Commission allegedly sent Tether — as well as cryptocurrency exchange Bitfinex, with whom it is closely affiliated — a subpoena in December, though it is not clear whether that investigation has or will result in any enforcement action.

However, earlier this year, a report from BitMEX Research found that Tether’s reserves are likely housed in the Puerto Rico-based Noble Bank. A follow-up investigation from Bloomberg found that Bitfinex and Tether are likely banking with Noble, but neither company has confirmed it publicly.